Real estate investment trust (Reit) Redefine Properties has maintained its guidance range of between 50c and 53c distributable income per share for the 2025 financial year.
Releasing a pre-close update for the half year ending February 28 on Tuesday, the group said commercial real estate transaction activity is picking up.
Redefine owns 59 retail properties in SA including Centurion Mall, Blue Route Mall, Benmore Centre, Centurion Lifestyle Centre, Cradlestone Mall and East Rand Mall. It also has assets in Poland.
US President Donald Trump has clouded the outlook for 2025, Redefine said. The stage has been set for a shallow interest rate easing cycle and escalating geoeconomic confrontation is stoking geopolitical tensions.
For SA, a possible investment-grade credit rating and the removal from the greylist would be “hugely beneficial” for the rand, bonds and local property stocks, it added.
Despite these headwinds, Redefine says it plans to focus on the variables under its control by disciplined capital allocation, actively recycling noncore assets, driving value creation and simplifying joint ventures to enable visibility of its income streams.
“The future of commercial real estate lies at the intersection of technology, flexibility and sustainability,” it said.
Its active occupancy rate in its SA portfolio rose to 94.2% as of January compared with 93.2% before.
During the period the group acquired a holding in Pan Africa Mall Phase 2, which is undergoing a multiphase upgrade and expansion process, for R276.2m and disposed of two properties for proceeds of R312m.
It expects rental reversion in its retail portfolio to continue improving based on overall rent-to-turnover ratios. It said national grocers occupying 8,500m² are commencing upgrades during 2025 with a further 5,000m² under negotiation.
It noted that demand for quality continues to improve in its SA office portfolio, which supports rental growth prospects. Active occupancy stood at 88.2% from 88.8% previously. Negative reversions are expected to improve to between negative 11%-15% by year end.
Active occupancy in its industrial portfolio rose to 97.6% from 94.5% before, with occupancies improving across all industrial categories due to higher demand for existing industrial units.
In Poland, Redefine noted a recovery in retail driven by growth in household spending due to improved disposable income.
Redefine said its debt restructuring is progressing well. During the period it refinanced a revolving credit facility of R2bn and raised R1.3bn in unsecured listed bonds in November across three-, five- and seven-year tenors. In addition, an unsecured listed bond auction was held in February, raising R800m. The refinancing of the remaining R560m term debt facilities that mature in the 2025 financial year is progressing well, it said.
Redefine will release its interim results on May 12.
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